Question
Sweet Air Flow sells prepaid HVAC contracts. When a contract is sold, cash is debited and contract revenue is credited. As of December 31, 2020,
- Sweet Air Flow sells prepaid HVAC contracts. When a contract is sold, cash is debited and contract revenue is credited. As of December 31, 2020, the year end, the following information was available regarding contract sales:
Date Sold Amount Contract Term
August 1 $72,000 1 year
October 1 $69,600 6 months
November 1 $42,000 3 months
The unadjusted balance of unearned contract revenue has a credit balance of $10,000. This represents contracts that expired during 2020. Give the adjusting entry needed for contract revenue.
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Fundamental Accounting Principles Volume II
Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann
16th Canadian edition
1259261433, 978-1260305838
